Channel Seven pay TV court case continues

The judge hearing the Seven Network case against some major Australian media players has asked why the channel did not offer more money to gain rights to key sporting events.

Transcript

ALI MOORE: Well, the judge hearing the Seven Network's case against some of Australia's major media players has asked why the channel didn't offer more money to gain rights to key sporting events that may have ensured the future of its pay TV arm. Seven is arguing its competitors breached the Trade Practices Act by colluding to put C7 out of business. Sue Lannin with this report.

SUE LANNIN: It was the Seven Network's ticket to Australia's pay TV market. But C7 closed in 2002 and now Seven is suing other media players, alleging they plotted to bring the channel down. In court British QC, Jonathan Sumption, returned to Seven's core arguments that its rivals devised a plan, in 2000, to win the rights to the AFL and NRL for pay TV operator, Foxtel. He said that under the agreement both sets of rights would be acquired by Seven's rivals and C7 would either disappear from the market or be reduced to a supplier of secondary content. News Limited, PBL and Telstra, the owners of Foxtel, have denied the existence of any plan. Mr Sumption told the judge, Ronald Sackville, that it was anti-competitive for the Foxtel consortium to have bid for the AFL rights after winning the NRL rights in December 2000.

Sackville J told Mr Sumption it seemed curious that Seven's rivals should withdraw from the bidding process for AFL rights when Seven had the opportunity of making a higher bid. Mr Sumption said, under the Trade Practices Act, allowing the consortium to bid would lessen competition. But Sackville J said that would deny the AFL the chance to get the highest price for its product. The judge asked why Seven hadn't offered more money for the rights, instead of bringing the case to court. He asked if the outcome was the result of Seven's decision not to participate in a fair bidding process. Mr Sumption argued that regardless of the fault of any parties, the result of the process reduced competition. He rejected suggestions that C7 failed because it was inferior to for Foxtel, alleging that senior News Limited executives created a strategy to put the channel out of business.